Stating that there can be no military solution to conflicts, he said that Iran seeks brotherly relations with all the Muslims nations and the countries of the region including India.
Addressing Muslim leaders and scholars belonging to different Islamic schools of thought in Hyderabad on Thursday, the first day of his three-day visit to India, his half an hour long speech was focused on calling for the unity among the Shias and Sunnis while holding the West responsible for sowing the seeds of discords among various sects of Muslims.
"India is a living museum of different ethnicities and religions peacefully co-existing. This process is going on for centuries. Shia, Sunnis, Sufis, Hindus, Sikhs and others are living together. They together built their country and built their civilization," Mr Rouhani said in his speech in Persian.
He noted that India and Iran have historical and cultural relations which go beyond political and economic ties and the people of two great countries share the same historical roots.
Mr Rouhani said Tehran seeks more cordial and closer relations with India in all areas of mutual interest.
He alleged that the West created rift among Muslims by instigated certain groups and outfits.
"They portray themselves as Islamic groups but we call them 'takfiri'. All those who follow 'qibla' (the direction in which Muslims offer namaz) and believe that there is no god but Allah and Mohammad is His last messenger are living together as brothers," he said.
Claiming that Iran in recent years made efforts to end conflicts and bloodshed in the region, he said that his country plans to enhance brotherhood with all Muslim nations and countries of the region.
"Iran is not seeking any discord with the other Muslim countries who have age-old relations with us. We believe that in case of differences, bullet is the not the solution. Dialogue and logic are the tools at our disposal to overcome the differences. There is no military solution. The solution has to be political," said Mr Rouhani.
He said that the Shias, Sunnis, Kurds and Christians lived together in Iraq and the same was true of Syria till the West created a discord there.
"We want to spread peace and also engage in dialogue while defending our rights. In case of need, we do believe in resistance and steadfastness," he added.
Mr Rouhani said the enemies of Islam were trying to portray Islam as a religion of violence. "The fact is that Islam is a religion of moderation, tolerance and forgiveness", he said extensively quoting from Quran and the sayings of Prophet Mohammad.
Quoting Quran, he said the Muslim community shoulder huge responsibility as they are present on this planet to spread good deeds and eradicate evils. Quoting a saying of Prophet Mohammad, he said oppressed irrespective of his faith should be helped.
Mr Rouhani said while during industrialization, the West plundered the mineral resources of the East and in the current age of technology, it is trying to plunder their culture and beliefs.
He said the solution to the problems faced by the humanity lie in returning to genuine Islam and underlined the need for educating all, especially youth, of the teaching of Quran and Prophet Mohammad, whom the Quran described as the mercy for humanity.
The Iranian President called for explaining how the Islam does not merely focus on issues of individual or family but it has the power to manage a society, politics, international relations, judicial issues, and social affairs. Islam rules and regulations for running affairs of the society, he added.